Wall Street trades up as U.S. inflation data lift dollar, Treasury yields
By Michael Connor
NEW YORK (Reuters) -
The dollar edged up and U.S. Treasuries prices fell on Tuesday as rising U.S. inflation drove speculation that the Federal Reserve, which is meeting this week, may raise interest rates sooner than global investors have been expecting.
Wall Street stocks rose modestly, as investors shrugged off the turmoil in Iraq and kept an eye on the Fed as it began its two-day policy meeting.
The S&P 500 ended near its record high after three days of gains. The inflation data helped bank shares, with the S&P Financial index .SPSY up just shy of 1 percent.
The Dow Jones industrial average .DJI rose 27.48 points or 0.16 percent, to end at 16,808.49. The S&P 500 .SPX gained 4.21 points or 0.22 percent, to 1,941.99. The Nasdaq Composite .IXIC added 16.13 points or 0.37 percent, at 4,337.23.
The U.S. Labor Department said its Consumer Price Index rose 0.4 percent last month. The gain was the largest since February 2013 and topped expectations for a 0.2 percent rise, following a 0.3 percent advance in April.
"It was a much stronger print than the market was expecting, and many are thinking that may lead to a more hawkish tone tomorrow,” said Michael Pond, head of global inflation-linked research at Barclays in New York.
Fed officials are expected to trim their bond-buying program further at the conclusion of their meeting on Wednesday, although the Fed is not expected to raise interest rates until mid-2015. Continued...